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Updated: Vistra "Fully Prepared" To Take Legal Action Against Any Hostile Bidder For Crius

Targets Achieving Investment Grade Rating, Says Will Help C&I Retail Business

Provides More Data On Retail Customer Counts

March 1, 2019

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Copyright 2010-19
Reporting by Paul Ring •

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During an earnings call yesterday, Vistra Energy CEO Curt Morgan said that Vistra is "fully prepared" to take any necessary legal action to defend its previously reported acquisition of Crius Energy should a hostile bidder attempt to disrupt the process.

As previously reported, Vistra agreed to increase the purchase price for Crius to an amount equating to $378 million, plus the assumption of Crius Energy net debt of approximately $108 million, in response to an unsolicited acquisition proposal for Crius from an unnamed third party bidder that was higher than the original purchase price.

Morgan during the investor call disclosed that the unnamed "hostile" bidder previously had an opportunity to be the successful bidder in the competitive auction process conducted by Crius leading up to the signing of the agreement with Vistra

Morgan cited stronger break-up protections included in the revised agreement with Crius, stating, "it is not our desire to get into a bidding war"

"I would also like to emphasize that we are fully prepared to take any necessary legal action that we believe is available to us to defend our acquisition of Crius against any efforts by the hostile bidder to disrupt and interfere with our acquisition," Morgan said

Morgan also discussed efforts by Vistra to achieve an investment grade credit rating

"We do want to get to investment grade," Morgan said, stating that such a rating would help its C&I retail business

"The credit spreads at least today probably don't say that that's something that's a big deal. But it's not about that, I think it would be good for the equity. And it also would open up opportunities on our commercial and industrial retail business where at times we have to sleeve, or we may not even get to see the business," Morgan said

As previously reported, as of Q4 2018, Vistra (the parent of TXU and other retail brands) was serving 1.487 million residential customers in ERCOT, down from 1.492 million residential customers as of Q3 2018, but up versus 1.472 million a year ago.

Vistra said that the net growth of 15,000 residential customers in ERCOT from Q4 2017 to Q4 2018 marked the first year its retail team has achieved net growth on an organic basis since 2008

Vistra serves a total of approximately 1.7 million customers in ERCOT (all customer classes)

As of December 31, 2018, Vistra provided electricity to approximately 23% and 20% of the residential and commercial customers in ERCOT, respectively.

Vistra provides retail electricity to approximately 1.1 million customers in Illinois, Massachusetts, Ohio and Pennsylvania.

See our prior story yesterday for further details on Vistra earnings and strategy

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